Other analysts have also raised concerns about Noble's results.
DBS Vickers analyst Mervin Song maintained his Hold call but slashed target price to $0.49 from $0.57 on Friday.
Calling Noble's third quarter results "underwhelming", Song said it will take time for Noble to "restore confidence" in whether its business model could continue generating sufficient positive free cashflow. Investors are also concerned about the valuation of its associates and offtake agreements, he added.
Song said concerns over Noble's cashflow generation and the valuation of its associations would be alleviated if Noble is able to realize the value of its assets by a partial or full divestment, securing a strategic investor to provide confidence over the long term viability of its business or generate positive free cashflow in a sustainable fashion.
OCBC's Carey Wong also kept his call at Hold and reduced the target price to $0.54 from $0.60. He noted that the main drag on Noble's earnings came from the metals and mining sector. Bright sparks are on the horizon however with the energy segment posting a 36 percent increase in shipment and a more than 400 percent increase in EBIT despite a 22 per cent drop in revenue. Cost has also been down every quarter since the last quarter of 2014
Nemesis Iceberg Research was relentless in its critique of Noble's results, noting that the company recorded operating cash outflow in the first nine months only because it had liquidated large amounts of inventories—an "artificial and temporary" measure.
"Traders structurally need inventories in their business. Their job is to move them. If there are no inventories, there is no business. Besides, Noble will have to use the proceeds of these inventories to pay its suppliers in the next quarter. We expect the effect to reverse in Q4 and Noble to end the year with deeper negative operating cash outflow. This raises even more doubts over their ability to refinance debt."